Polish rich are different from you and me

By bne IntelliNews December 5, 2014

Jan Cienski in Warsaw -

 

Making about $2,000 a month may not be everyone’s definition of being rich, but that’s what it takes to be included in the top ranks of wealthy Poles, according to KPMG.

About 878,000 Poles earn over PLN7,100  (€1,700) a month, enough to push them into the country’s upper tax bracket – that is up from  786,000 people making the grade a year ago. The consultancy expects the number of wealthier than average Poles to reach 1.1m by 2017. In 2014, those earnings came to PLN141bn, or about 10% of Poland’s GDP.

“Poland is chasing the West,” says Andrezj Marczak, one of the report’s authors. “From year to year the number of wealthy and rich Poles is growing, as are their combined earnings. We expect this growth trend to continue in the future.”

Still, he expects average incomes in Poland to match west European levels in only 43 years.

With Poland’s better-than-expected economic performance coming largely from domestic demand, the spending habits of wealthier Poles are a crucial factor in the allowing the country to weather the economic slowdown visible in the Eurozone and the buffeting currently being felt in Ukraine and Russia.

KPMG estimates that the luxury goods market – everything from high-end cars to fancy watches and swish hotels – comes to about PLN12.6bn, a 15% increase over last year. By 2017 the consultancy expects that to grow to PLN17bn.

Still, like the definition of who makes the cut to be considered wealthy, the spending patterns of richer Poles are not quite the same as top end west Europeans. In Poland, sales of goods like yachts and private airplanes are almost non-existent, while most luxury goods spending goes on things like cars (often used) and clothing.

“Our luxury is luxury ‘Made in Poland’  when it comes to criteria like the level of earnings, accessibility of luxury goods or consumer behaviour,” admits Marczak.

Although Poland is a significantly wealthier place than it was a quarter century ago when 'shock therapy' reforms created a market economy, the country is still far behind western Europe. Average assets of individual Poles come to about $22,000, about one-seventh of the level in the old EU. Poland also has many fewer really wealthy people. There are about 47,000 people with liquid assets above $1m, while in France almost 2.5m people have reached the universal definition of being rich. In all, Poland’s per capita assets come in 23rd out of the EU’s 28 members. But because Poland is such a new market economy, almost all of those assets were earned – not inherited.

 

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